For anyone who is facing into protracted bargaining for an enterprise agreement, the question that is likely on their mind is “what will happen if we hand over control to the Fair Work Commission (“FWC”) to decide the terms that we cannot reach agreement with the union on?”

The first FWC intractable bargaining determination decision in Transport Workers’ Union of Australia v Cleanaway Operations Pty Ltd [2024] FWCFB 287 provides some insights into what the FWC is likely to take into account and what will need to be prepared by an employer in support of their position.

What are the key takeaways?

The key takeaways from the decision for employers are:

• while the FWC’s determination of wage outcomes do not lend themselves to “decision rules” or “mathematical formulas” they did in this case have close regard to inflation and wage indexes;
• retrospective and front-loaded increases of 6% on 1 July 2023 followed by 5% on 1 January 2024 were determined in this case after the FWC took into account the 21-month period without a pay rise and the CPI and Wage Price Index (“WPI”) for that approximate period;
• future increases which are higher than the expected CPI and WPI of 4% per annum were determined as fair in this case, where the employer had previously offered 4% in agreements it unsuccessfully tried to put to a vote of employee;
• on the other disputed conditions around rostering for ordinary hours on weekends, penalty rates for ordinary hours on weekend and how long the workplace determination would operate, the FWC generally aimed for an outcome which satisfied all the parties’ interests (which the FWC accepted were legitimate interests).

For further information about the reasons for the decision see our blog exploring the reasons further here.

What is an employer going to need to prepare?

Another major takeaway from the FWC’s responses to the submissions and material presented by the employer and the Union in this case is that broad assertions in submissions and broad statistical evidence that is not industry specific, without evidence directed to the particular submissions about the workplace or industry will be rejected by the Commission.

An employer can expect to have to prepare written statements from relevant managers and officers about the business’ reasons for needing a particular condition or term in an enterprise agreement. Statistical information about the business’ experiences specific to a particular term or condition or to the employer’s rationale should also be compiled for presentation to the FWC.

Any terms of an existing agreement which are favourable to an employer should not be allowed to fall into disuse. Any existing clauses which already provide a condition would ordinarily weigh in favour of the FWC retaining the condition. However, if a practice has developed which effectively ignores the condition, that will change the goal posts.

An employer may also want to prepare evidence supporting submissions that go to the “public interest” which the FWC accepted in this case, included:

• achievement of the objects of the Act;
• employment levels;
• inflation;
• the maintenance of appropriate industrial standards;
• job security;
• increased opportunities for permanent employment; and
• environmental sustainability measures (such as increasing separate organic waste disposal to reduce landfill).

PCS provides advice and assistance to employers bargaining for enterprise agreements or wanting assistance on any industrial relations matters.

For further analysis of the reasons in this decision see our blog here.

Michael Nguyen, Senior Associate